Decision-making in the inductive mode : The role of human behavior

University essay from KTH/Entreprenörskap och Innovation

Abstract: Economists have convulsively maintained the assumption that humans are able to arrive at decisions by perfect deductive rationality, despite the fact empirical evidences are showing otherwise. The contradicting evidences have resulted in a personal view that instead of finding a unified theory about decision-making, a sound approach would be to study how humans in fact are reasoning in specific contexts. The context of interest for this paper is where it could be assumed humans’ persistence of acting rational is determined by the perceived burden of the problem. In this work, the inductive way of arriving at decisions plays an important role, and the paper will present a way of describing this process in a consistent way. The process will be denoted as the actual level of behavioral change, and represent the core property of this paper. Applying the presented theory is most appropriate for situations where it could be assumed the burden of a problem, expressed as a prevalence rate, will drive the behavioral change. The line of reasoning in this paper will therefore be applied to the important arena of fighting the spread of HIV.

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